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MEMORANDUM TO: Deans, Directors, Department Chairs FROM: Bill Shorter Evelyn Wilson DATE: November 28, 2007 SUBJECT: State Compliance Audit Recently, the State Department of Accounts conducted a compliance audit of Radford University’s accounts payable function. This audit was conducted to determine whether RU was in compliance with its Memorandum of Understanding (MOU) governing the Decentralization of Financial Records Program and State policies and procedures. This MOU authorizes RU to write non-payroll checks locally rather than transmitting the data to Richmond for check generation. Failure to comply with the requirements of the MOU could result in the loss of decentralization authority for accounts payable. The audit identified several compliance issues which are being addressed below: 1. Travel expense reimbursement vouchers were not submitted in accordance with established time limits. Per State travel policies and procedures, the established time limits are: Step Submission Approval Processing Description Employee must submit the Travel Expense Reimbursement Voucher to the supervisor within thirty (30) working days after completion of the trip. In the case of continuous travel, the employee must submit the travel voucher to the supervisor within thirty (30) working days of the last date of travel for which reimbursement is requested. However, please note that the traveler must submit travel reimbursement vouchers in a sufficient timeframe to allow the traveler to pay monthly travel charge card bills by the specified due date. For all travel vouchers: An appropriate authority (i.e., supervisor and/or designee) must approve and submit the travel voucher to Accounting Services for processing within three (3) working days of receipt from the employee. For non-state employee travel vouchers: Agency head or designee must approve and submit the travel voucher to Accounting Services within three (3) working days of receipt from the non-state employee. After receipt of the travel voucher, Accounting Services must process the voucher within five (5) working days. Effective with all travel occurring on and after December 1, 2007, travel reimbursement vouchers received in Accounting Services that do not adhere to these established time limits will not be processed and will be returned to the traveler. The traveler will be required to provide written documentation to explain why the reimbursement voucher request did not comply with the established time limits. 2. Travel expenses for multiple days were often combined instead of listing expenses separately for each day of travel. Effective with all travel occurring on and after December 1, 2007, travel expenses must be listed separately for each day of travel. Reimbursement vouchers received in Accounting Services that do not list expenses separately for each day of travel will not be processed and will be returned to the traveler for correction. 3. Designee approval was not obtained in advance for business meals and for lodging up to 150% above the state guidelines. For business meals and travel expenses exceeding the state guidelines (i.e., up to 150% above the state limit), designee approval must be obtained prior to the expenses being incurred. Effective with all travel occurring on and after December 1, 2007, travel reimbursement vouchers for such expenses received in Accounting Services that do not have designee approval, or for which designee approval was acquired after the fact will not be processed and will be returned to the traveler. The traveler will have to document why designee approval was not obtained prior to the travel. 4. Airline boarding pass was not included with travel expense supporting documentation. State travel regulations require that boarding passes be submitted as supporting documentation for air, rail, and bus travel. Effective with all travel occurring on and after December 1, 2007, Accounting Services will return travel reimbursement vouchers that are lacking this supporting documentation to the traveler. The traveler will have to provide the boarding pass or document why the supporting information is not available. 5. Purchase orders were not issued prior to an expense being incurred. University employees do not have authorization to commit RU to a procurement action without proper approval. Effective immediately, invoices received in Accounting Services without a corresponding purchase order approved prior to the purchase, will not be processed and will be sent to the purchaser. The purchaser will be liable for the expense. No commitment should be made or order placed with a vendor prior to the issuance of a purchase order. Even with GE MasterCard, Concerto Office Products, and other blanket purchases, purchase requests must be entered in IFAS and have a valid purchase order number generated prior to actual commitment to purchase goods and/or services. It is also the department’s responsibility to insure sufficient encumbrance balances exist on these orders to cover anticipated purchases for the entire fiscal year. In addition to the compliance issues described above, the State also has a requirement that all employees likely to travel on official University business more than twice per year be reimbursed using the State’s electronic data interchange (EDI) program. Contact Hubert Barton (extension #7619) or Carlotta Lewis (extension #7613) for details on how to access the EDI program. The University is currently pursuing additional financial autonomy from State policies and procedures. It is very important, therefore, that we maintain compliance with existing decentralization policies and procedures. Strict adherence to all university and State policies and procedures will enhance RU’s chances of being successful in securing additional autonomy from State financial requirements. Please disseminate this memorandum to all appropriate personnel in your area.